You Call This a Budget Problem?
Let me start this by saying the state finding this week more than $200 million in local option income taxes is a little embarrassing, but it is not the end of the world, in fact, if you look at it from a bigger picture, it’s actually a positive. Allow me to explain.
Although I write about Indiana government and politics I spend a lot of time paying attention to other state governments, I’m kind of a dork that way. And when I look at the current financial situations in other states, I am willing to bet the $529 million in total revenue the state misplaced and tell you there are a lot of other places that wish they had Indiana’s problems.
In other words, in Indiana, the problem may be missing money, in more than two dozen other states, money isn’t missing, it’s just not there. According to the Center on Budget Policy and Priorities, 30 states have projected shortfalls for next fiscal year and have had to engage in drastic spending cuts or raise taxes over the 2011-2013 budget years. I’ve listed a sample just below…
- Illinois – $1.1 Billion
- California – $8.4 billion
- New York – $2 billion
- Ohio – $3 billion
- Kentucky – $371 million
If you picked up the L.A. Times or Chicago Tribune and read about Indiana’s money problems which are basically accounting errors which still resulted in a nearly $2 billion budget surplus, taxpayer refunds wouldn’t you wish you had these problems, instead, all you get is tax increases, neglected infrastructure, service cuts and more inefficiencies.
And here’s another added benefit of this entire situation, if local governments have gone without this money in for the past couple of years, doesn’t that raise the question of whether it’s really needed in the first place? Just a thought, which I will expound on in another blog post.
So is this embarrassing for the Daniels administration, yes, especially since finances are supposed to be its area of specialty. And this problem is easily fixed by doing a top to bottom audit to make sure dollars collected are put in the proper funds for distribution. But when I look at this from a broader context and more global perspective, if Indiana’s biggest problem is misplacing money and still maintaining a surplus and giving back taxpayer refunds in the worst economy since the Great Depression, I’ll take that any day over the alternative.
